Eric Hammer, contributor to DailyForex.com, highlights three South American currencies that typically fly under the radar but are worthy of consideration by forex traders looking for fresh opportunities.

In the daily hubbub of investing and trading the forex markets, we tend to hear constantly about how the euro is doing, or the US dollar, or the British pound. We also tend to hear an awful lot about hotspots in the world, especially in the Middle East, where most of the world’s oil comes from. But what about other places, like South America?

I did some digging and found out that there are some real investment opportunities, and yes, forex gems for those who want to take the time to look into them. Here’s what you need to know:

Brazil

One of the hottest investment opportunities on the planet today is, of course, Brazil, which forms the first of the BRIC emerging markets group (the other three being Russia, India and China). The Brazilian economy has weathered the recent global recession rather well and is also less susceptible to oil shocks than most other large economies because Brazil has learned to harness immense power from sugar cane ethanol. This makes Brazil a prime investment opportunity for those interested in something a little off the beaten path.

For forex traders, the Brazilian real has maintained a steady climb versus the US dollar, meaning that there is potential for some nice payoffs from this country and currency.

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Columbia

You don’t tend to hear about Colombia unless it’s about drug lords (in fact, most people, when they hear “Colombia” sadly tend to append the second term to the name of the country). However, Colombia is not what it once was. The country has largely cleaned up the drug trade and is now becoming a hot emerging market.

Colombia is on track to become the second-largest economy in South America when it overtakes Argentina in a few years, and it also has begun to expand the middle class.

Like the Brazilian real, the Colombian peso has also flattened from a recent downturn and looks like it may be forming a short-term base. It has hinted at a rise, though not dramatically. This is an economy to watch and possibly one to invest in for those who have a great tolerance for risk.

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Chile

Finally, Chile is an interesting country for those interested in mining investments. The country is very rich in natural resources and uses that advantage to help to build the economy. Chile is not particularly wealthy, though there is a growing middle class here as well. Moreover, the country is quite stable and has been for some time, which is always good news for investors.

Unlike the other two countries profiled here, though, Chile may not be a good choice for forex investors since the Chilean peso seems to be having a bit of a roller coaster ride against the dollar, at least when compared with many other world currencies. However, currency traders with high risk tolerance may find the recent relative stabilization a positive sign.

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By Eric Hammer, contributor, DailyForex.com